I would not categorize Of Mice and Men as a Local Color Tale. While Steinbeck does rely heavily on dialect and colloquialism (traits of Local Color writing), his dialogue style does not drive the novella. Rather, Of Mice and Men is thematic in nature and, unlike many Local Color works, it possesses a structured, suspenseful plot. Another dissimilarity between OMAM and other Local Color works is that place setting is not all important in Steinbeck's novella. Because he strove to illustrate the plight of the common man and the outcast, Steinbeck took care to make his works as realistic as possible. He lived with migrant workers to be able to capture their dialect but more importantly to be able to express the difficulties they faced. In doing so, Steinbeck was able to write a novella that is not only realistic but that appeals thematically to virtually every American. His themes of isolation--whether it results from race, diabilities, or gender--vanquished dreams, and American disillusionment are widely applicable, not just to his time period or setting but to all Americans then and now. This universal appeal separates Steinbeck's work from traditional Local Color writers who often use setting as another character in their stories. Thus, while you can certainly find many Local Color aspects in Of Mice and Men, Steinbeck as a modern American writer focuses more on the theme of disillusionment with the American Dream rather than on portraying the culture of a particular region.
I would have to argue that no, it is not a typical local color story, nor do I think that Steinbeck wrote it as such. The characters are certainly rich, and central to the story, but the Great Depression was nationwide (worldwide) and Lennie and George's economic and personal situation were typical in all regions, not just 1930s California.
Candy is an elderly man and physically challenged, which highlighted two groups all across the country who were first hit and hardest hit by the Depression.
Women were socially second class citizens, their opinions and feelings often disregarded in the home and society. Curley's wife is never given a proper name in the book, I think to highlight this common--rather than local--situation.
And lastly, take Crooks for example. He is a segregated black man both legally and socially, just like, at that time, virtually every other African-American in the country.
Of Mice and Men is a social commentary on a much grander social scale, told through the eyes and experiences of typical Americans.
Many people view Of Mice and Men as a local color story. Local color stories are considered to focus on character, dialect, geography, customs and culture that relate to a specific area or region. Of Mice and Men has a setting that is strongly influenced by its surrounding region. Life on the California farm is defined by this setting. The people act in ways specific to migrant workers of this area and they speak in a dialect that reflects this. Their slang reflects the local color and helps to define the novel as fitting into this type of story.
Even George and Lennie's lifestyle as migrant workers is particular to this region, which was not as developed as it is now. Again, the region or area helps to define the characters of the novel - which is important to local color stories.
Generally, local color stories tend to take place in areas that are removed from the bulk of civilization, or where many other people live. This again is true of Of Mice and Men. The goal of local color stories is to bring the specifics and peculiarities of a certain area to life.